HEEDING LAGARDE WARNINGS GOOD FOR LIBERIA By Paul Allen White (PAW)
It was natural for the Liberian government to savor with excitement the moment that the head of the International Monetary Fund came avisiting. For a country grappling with economic challenges, it does bring a sense of reassurance that if anything, the world’s most powerful economic watchdog is keeping her on its radar.
Christine Lagarde, the IMF boss confirmed as much when she enthused: “…the IMF will remain fully engaged in Liberia’s ongoing recovery efforts to ensure that the country returns to strong and inclusive growth—a reflection of our close partnership since Liberia joined the Fund in 1963.”
Flanked by Liberia’s former Finance Minister, Dr. Antonette Sayeh, Director of the IMF’s African Department, Ms. Lagarde’s Liberia’s mission was critical in several respects but two of which we believe could have significant implication for the country’s immediate future. That is why beyond the pomp and pageantry occasioned by the mission, the IMF didn’t allow the occasion to fade without sending two strong and blunt messages to the political system.
First and critical was the fact that the fund was watching the political landscape closely, advising the country’s political elite and the ruling government that two years was enough a time to concentrate on reassessing the country’s economic strategy such that everyone can be involved in getting development back on track. In this wise, Lagarde explicitly advised the country’s political actors to avoid the distraction of political bickering and focus on development until elections are due.
“I have been in politics myself, election time is two years. There is plenty of time to deliver all the work, get it done for the good of all the people. Then election will come and people will seek out who they think is the best person to vote in office, but get the country in good shape,” she charged.
Of course the message was powerful enough to echo across a country where the political actors usually busy themselves with fighting for credits rather than performing their tasks thereby hurting the people for whom they claim to be fighting.
The underlying theme being that if the political community had any interest in the future of the country as well as its people, they will heed Ms. Lagarde’s advice and invest the next 24 months or more in achieving some national development targets to alleviate the sufferings of the ordinary people.
In contrast to her first message, the second was however reserved for a much more private audience and was perhaps very much unwelcome. It was the sort of language reserved for a one-one meeting of minds and of course in this instance Lagarde didn’t disappoint.
The message was reserved for Liberia’s Central Bank Governor, Mr. Joseph Mills Jones, the man bankrolling a somewhat controversial lending spree that Lagarde stressed could torpedo the already fragile economy if left unchecked.
The full text of the tongue lashing is censored, but Capitol Insider can exclusively report that the IMF’s Managing Director was concerned about the Central Bank’s lending policies, going as far as cautioning Madam President to act or else, she may have to recapitalize the Central Bank when Governor Jones’ tenure is up.
She was said to have opined that Jones had lost his way as a central banker. In fact, he even had positioned the Central Bank of Liberia as a big commercial bank. Judging by what could have been seen as Ms. Lagarde’s 'undiplomatic' approach to the issue, it can be assumed that the IMF boss merely found a good occasion to meet Jones face to face amidst concern about his political ambition; an ambition that has seen him allegedly spend bank resources under the guise of a loan program.
It is, in truth, far too easy to detect that the governor may be spending with a motive and given the autonomy he enjoys at the Central Bank, the President has been unable to deal with this for some time. For anyone who understands political economy and is interested in the wellbeing of the country, these were very powerful messages that reverberate across the nooks and crannies of the nation. These messages need to be heeded and appropriate actions taken as the consequences could be grave and damaging. Imagine for a second, if the country has to take resources away from vital undertakings such as road construction, healthcare delivery, or improvement in education and divert same to capitalizing the Central Bank. And if we have to do this simply and largely because a politically, self-interested, “Central Bank Governor” poorly managed the bank and destroyed its fundamentals. Such a moral crime should be prevented.
The other cardinal message which Ms. Lagarde left with Liberians about all actors committing to the country’s development for the next 24 months, is also extremely important especially as the global economy is experiencing some serious stress and the country is just recovering from the impact of the EVD. The consequence of not heeding the warning could therefore be far reaching and catastrophic. So it is in the country’s interest for everyone to continue to play their individual and collective role, in the spirit of patriotism, to keep the country moving in the right direction.
The fact remains that in addition to all the gifts the IMF provided Liberia during the EVD in form of loans and debt waiver, the most important and valuable of those gifts was the message Ms. Lagarde brought in person. Her frank approach in raising the cardinal issues with the political leadership of the country and monetary authority while alerting them of the potential consequences if corrective actions are not taken is the most important contribution that any global figure can provide for a country so much in need.
Culled from The CAPITOL INSIDER October-November 2015